Brie Olutu pumps gas at the Exxon Mobil gas station on June 09, 2022 in Houston, Texas. Gas prices are crossing record highs due to increased demand and lack of supply.
Brandon Bell | Getty Images
Prices at the pump have retreated from levels never seen before in June, but remain stubbornly high.
There may be some relief. US petrol futures Oil prices are down more than 11% this week after falling as fears of a recession spark concerns around a slump in demand.
The national average for a gallon of gas on Thursday was $4.75, according to AAA. This is down from the record low of $5.016 recorded on June 14. But prices are still $1.62 higher than last year.
California has the highest state average of $6.185. The state’s Mono County currently averages $7.224 per gallon. South Carolina’s average of $4.257 is the lowest in the US
Patrick De Haan, head of petroleum analysis at GasBuddy, said the national average could fall to between $4 and $4.25 by mid-August, excluding the rise in oil prices.
West Texas Intermediate CrudeUS oil benchmark, slipped below $100 a barrel On a Tuesday for the first time since mid-May. Oil accounts for more than half the cost of gasoline, with refining expenses and taxes, among other things, affecting prices.
On Thursday, WTI was trading at around $99.51 a barrel, while gasoline futures were up 1.2% at $3.27 a gallon.
Prices at the pump rise faster than they fall, as stations lock in profits in an ultra-competitive business.
“When [oil] When prices rise, stations are usually 2-5 days behind price increases until the uptrend stops,” De Haan said. This means they can lag behind in raising prices for weeks. When prices finally fall, they gradually reduce prices in order to regain margin from the time the price rises. Likely when relief finally comes,” he said.
But there were some positive signs of easing. De Haan counts 2,535 gas stations with prices below $3.99 on Thursday. even though it is only a small part of 145,000 gas stations in the countryDe Haan expects that number to double or even triple in the next week or two.
Record prices ahead of the mid-term election in November have caused massive inflation and a headache for the Biden administration.
President Joe Biden Called Congress in June federal gas tax temporarily suspendedBut such a move has received little support from lawmakers.
Looking ahead, some Wall Street firms believe oil prices will return to prior highs, which will mean only temporary relief at the pump. Goldman Sachs is calling crude oil, the international oil benchmark, to reach $140 this summer. It was trading at $101.81 on Thursday. Meanwhile City has been an oil bear for some time, and said on Tuesday that Brent could hit $65 by the end of the year Should the economy be headed for a recession?
Other factors that could push gas prices up again include a storm or any refining-related problems, with refineries already operating near peak capacity.
Andy Lipo, president of Lipo Oil Associates, forecasts the national average to fall to $4.50. Without any major disruption, the prices are likely to fall further.
“If we can get through the next six weeks without a big storm, we’re looking at $4.40,” he said.